Microhoo Fallout? Kevin Johnson Leaves Microsoft

Johnson was the driving force behind the run at Yahoo! and was head of the Platform & Services Division, the largest group at Microsoft, containing Windows, Live, Advertising (APS) and a few other things.

Why Did He Leave

AdViking believes that the run on Yahoo! is a (defensive) tactical play to ramp up the Search side of things and protect Windows and Office revenues (i.e.: the part of the Cloud War rather than the Search Battle).

This run currently looks like it was a failure and some of the moves that were taken looked ill-conceived and the impact was that Ballmer and Microsoft currently look like they have egg on their faces. The price to pay for this is that Kevin Johnson is leaving.

The Impact

The immediate impact is that they have now split Johnson’s empire into two groups:

Windows/Live – Reports directly to Ballmer

Online Services Business – The search is on to fill this gap. This fact is surprising and a clue to the fact this was an unplanned exit.

Picking up on the point that there is no-one in place to head up the Online Services Business, an interesting echo from the sphere is that this could possibly leave room for an acquisition CEO to fit into a key role nicely (e.g.: Jerry Yang)

AdViking thinks this split makes a lot of sense and from looking at the Org chart before yesterday, didn’t quite understand why two such important groups rolled up under one Exec.

AdViking further likes the split as it does mean that the advertising side of the business will now have more power and therefore will be able to offer the industry an even more competitive offering.

Background Materials

News of the departure and re-org was announced in a few ways including a 2009 Strategic Update email from Ballmer. This has had wide coverage in full text.

Some interesting tidbits to pull-out from these:

Betting on Display Advertising

Senior Vice President Brian McAndrews will continue to lead the Advertiser & Publisher Solutions Group (APS)…McAndrews will continue to focus on the display advertising opportunity for Microsoft

Google and Search

We continue to compete with Google on two fronts—in the enterprise, where we lead; and in search, where we trail. In search, our technology has come a long way in a very short time and it’s an area where we’ll continue to invest to be a market leader. Why? Because search is the key to unlocking the enormous market opportunities in advertising, and it is an area that is ripe for innovation. In the coming years, we’ll make progress against Google in search first by upping the ante in R&D through organic innovation and strategic acquisitions. Second, we will out-innovate Google in key areas—we’re already seeing this in our maps and news search. Third, we are going to reinvent the search category through user experience and business model innovation. We’ll introduce new approaches that move beyond a white page with 10 blue links to provide customers with a customized view of their world. This is a long-term battle for our company—and it’s one we’ll continue to fight with persistence and tenacity.

On the Yahoo Run

…I want to emphasize the point I’ve been making all along–Yahoo was a tactic, not a strategy. We want to accelerate our share of search queries and create a bigger pool of advertisers, and Yahoo would have helped us get there faster.

[…] Swisher in AllThingsDigital this morning, yt’s just been announced that Microsoft has replaced Kevin Johnson with Qi Lu and that Brian McAndrews is leaving. It’s also been announced there is shuffling […]